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Lendingkart Finance, the NBFC arm of online lending platform Lendingkart, has raised Rs 30 crore ($4.7 million) in non-convertible debentures from the Netherlands Development Finance Company (FMO), a company statement said.

The firm will use the funds to beef up its loan books, the press note added.

“Digital lending is an exciting and a large space that has grown tremendously in the last couple of years. The innovation that the sector has witnessed has played a key role in bringing financial inclusivity to the remotest corners of India,” Marnix Monsfort, head of financial institutions, Asia at FMO, said.

Founded in 1970, FMO operates as a bank that finances the funding needs of the private sector. Structured as a public-private partnership entity, around 51% of its stake is held by the Dutch state and 49% is held by commercial banks, trade unions and other members of the private sector, according to information available on the bank’s website.

The bank, which initially started off as a financial institution, attained bank status in 2008 and has made investments in 85 countries across the world. India is the bank’s largest portfolio with a committed investment portfolio exceeding $500 million, Jürgen Rigterink, the bank’s chief executive and chairman, had told VCCircle in an interaction last year. He also added that the bank has seen a significant increase of non-performing loans in the country and many of its investments in private equity funds have shown low liquidity. The bank will, henceforth, selectively invest in new funds, he said.

The bank’s other Indian investments include FRV Andhra Pradesh Solar Farm ($14.6 million), Gobind Sugar Mills ($16 million) and Azure Power India Pvt Ltd ($29.8 million), all made in 2017.

“This being our first foreign debt raise, it will open avenues for Lendingkart Finance’s future foreign debt funding as well,” Harshvardhan Lunia, co-founder and chief executive of Lendingkart, said.

Being the non-banking finance arm of the business which underwrites the loans, Lendingkart Finance has raised debt funding at frequent intervals. Only last month, it had secured Rs 25 crore ($3.92 million) in cash credit facility from State Bank of India.

Between August and September 2017, it raised Rs 162 crore ($24.9 million) through a mix of debt and equity from financial institutions and NBFCs including IFMR Capital, Capital First, Tata Capital Financial Services Ltd (TCFSI) and Manappuram Finance Ltd.

Lendingkart Group was founded in 2014 by Harshvardhan Lunia and Mukul Sachan. It operates two entities – Lendingkart Technologies Pvt. Ltd and Lendingkart Finance, which was formerly known as Aadri Infin Ltd.

A chartered accountant by qualification, Lunia had earlier founded Domestic Finance and Investment Pvt Ltd, a company involved in designing and arranging credit solutions for small and medium enterprises in India. He has also worked at ICICI Bank, Standard Chartered Bank and HDFC Bank.

Lendingkart Finance underwrites loans for small and medium enterprises from its own books. The entity provides collateral-free working capital loans ranging from Rs 50,000 to Rs 10 lakh. The company claims to have disbursed over 20,000 loans to more than 13,000 SMEs operating in 23 diverse sectors across 950 cities and towns across India.

In an interaction with VCCircle in June last year, Lunia said that the company was planning to raise an additional Rs 500 crore in debt and will disburse Rs 1,500-1,600 crore worth of loans in 2017-18.